Companies need to use contingent labor but they tend to do so haphazardly - without building a contingent labor strategy. Worse, they tend to procure services from freelance workers as though they were buying goods, looking for more product for less money.

If I say this is ridiculous I can easily be accused of special leading. I freelance and I tire of people wanting to rip 10% of more out of a budget for creative work. There are few areas of procurement that fail so inevitably because companies insist on discounts. Special pleading over. Here are the points that came out of my discussion with Gene. How to be better at buying services:

1.Integrate the freelance or independent in the overall talent strategy.

"Contract talent is an important segment of the workforce and should be integrated into an organization’s overall talent strategy. Studies have shown that organizations that use contract talent management-specific tools, systems and programs (i.e., MSPs, VMS’, and ICES’) are more effective in leveraging contract talent and mitigating related risks. In order for organizations to truly reap the benefits that CT can provide to their organization, they must consider the management of CT much more strategically and as a talent management imperative for the new normal of the project economy," says Gene and I can't disagree with any of that.

2. Building a respect system

A lot of my work is in the innovation field where companies like P&G, NokiaSiemens Networks and Alcatel Lucent have quickly learned that in a socially connected world treating small companies and freelance talent badly can quickly backfire. That might sound obvious but for the independent to function well he or she needs a process as clear as an employee onboarding process, and a channel of communication into the company beyond the contact point. Companies in the open innovation space are really learning how important this is - the smaller the partner, the more vulnerable they feel, and you don't want talent feeling vulnerable.

3. Avoid Worker misclassification.

Worker misclassification (where companies are accused of treating employees as independent contractors for the purpose of avoiding payroll taxes, benefits, and other employer obligations) has been a hot button issue spurring a surge in class action lawsuits and government regulations. In 2011, seven misclassification laws were passed in six states. Compliance determination is complex and ambiguous, with even experienced auditors sometimes disagreeing on compliance status - okay open plug for MBO here: You can mitigate the risk of worker misclassification by working with companies like MBO Partners who provide an infrastructure for organizations to utilize contract talent. In fact, a 2010 study by the Aberdeen group showed that Independent Contractor Engagement Specialist (ICES) solutions were utilized in 60% more Best-In-Class companies than all others.